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The End of Poverty?

We can make poverty history, but not if we accept the logic of market liberalization.

Make Poverty History is going to pull vast numbers to Edinburgh the Saturday before the G8 opens in Scotland next month. They will be living testimony to the enormous feeling over world poverty, particularly in Africa. They will also show how much things have moved on since the time of Band Aid, when the single message was one of charity. Now it is one which involves calls for political action on debt, trade and aid.

But there is a danger of the demonstration's message being diluted. Some of the those running Make Poverty History have decided that the way to achieve its goals is to court sections of the existing political and economic establishment. They seem to believe that if they are nice to government ministers, the heads of certain multinational corporations and some people associated with the IMF/World Bank nexus, those people will turn fine words about the plight of the poor into action.

Stern policy

Bono did a tour of poor countries three years ago with Paul O'Neill, Bush's then secretary of the treasury and former head of the aluminium giant Alcoa. Oxfam has repeatedly been extremely complimentary to Gordon Brown, expressing delight at 'the challenge the chancellor has set to the international community'. Bob Geldof chaired New Labour's Commission on Africa. Among its 19 members were not only Blair, Brown and Hilary Benn, but also former IMF chief Michel Camdessus and several other people who have worked with the IMF, especially in implementing its programmes in Africa. The Commission's Director of Policy and Research is Nicholas Stern, formerly chief economist of the World Bank (where he took the place of the sacked Joseph Stiglitz).

And now Bono has written a laudatory introduction to the new Penguin paperback The End of Poverty by Jeffrey Sachs. Sachs is head of the UN's Millennium Project; his qualifications for this lie in a long history of advising Latin American governments (Bolivia, Brazil, Argentina, pre-Chavez Venezuela) to impose neo-liberal policies, and the Polish and Russian governments to rush to the market. He makes no apologies for such actions in the book, writing that it was 'sad' that an uprising of Bolivia's workers and peasants drove his former collaborator, the president Goni Sanchez de Lozada, from office 18 months ago. Sachs proclaims his support for Make Poverty History (as does Blair) and shows genuine distress at the conditions he has seen among the world's very poor. But he clearly does not support the poor when they rise up against those who have made them poor - the rich and the international institutions he has worked with.

Sachs, Camdessus, Stern and the others sincerely believe they have an agenda to Make Poverty History. But it is an agenda based on a deep faith in capitalism, markets and neo-liberalism, despite the record of these things causing poverty in the past. This is one underlying theme common to the Commission on Africa, to Brown and Blair's speeches and to Sachs's book. They all conclude:

'The private sector should be mainly responsible for investments in business, whether in agriculture, industry or services...' (Sachs, p252). 'Experience has shown that private entrepreneurs do a better job at running businesses than governments' (p254). 'Growth is driven principally by the private sector...' (Commission on Africa).

The globalised competitive system provides the way for any country to advance through untrammelled trade. Once they gain a foothold on to the bottom rung... of the ladder of development', as Sachs puts it, they can then 'proceed to climb on their own'.

But they see three problems for capitalism in Africa:

First, the Commission on Africa gives great emphasis to 'bad' and 'corrupt' governance in much of the continent: 'If people are to feel safe about investing their money in a country they need to feel confident that the law will be upheld, that contracts will be enforced, that business regulations will not be imposed merely to secure an endless stream of bribes for corrupt officials...'

Second, the rich countries do not always provide a 'level playing field' for trade, and must move to get rid of subsidies to agricultural products.

Third, some countries will not be able to get their feet on the 'the bottom rung' without limited external help. These are too poor for capitalism even to take off properly, they believe, and so urge debt relief and increased aid for them. It is these demands which seem to make them allies of the anti-poverty movement, since it implies doing a little more than western governments have done in the past.

But even here what they are prepared to suggest is very limited. Aid is for the poorest countries - the ones which will never be able to pay off their debts anyway - and not for the not so poor ones. Aid is to be similarly targeted, and the goal is only to raise it to 0.7 percent of total world income - an increase of only about 0.3 percent. This meagre amount - less than one tenth of what the G8 spend on the military - is meant to make up for centuries of imperialist exploitation and enable the poorest people in the world to compete on equal terms with the richest! And in return, they all insist, the poor countries have to allow the rich ones to dictate how they are run. 'Poor countries', writes Sachs, for instance, 'only have that right... to receive assistance from rich countries... if they themselves carry through their commitments to good governance.'

There are differences of emphasis among the neo-liberal poverty advisers. Sachs, for instance, recognises that poverty and western intervention have contributed to 'bad governance' and that corruption exists in the west. He also warns that scrapping all subsidies to agriculture in the advanced countries might not help African poverty, since 'if Europe cut back on its subsidies for staple crops (wheat, maize), the results for Africa could well be negative, not positive, since Africa is a food importing region... Africa will unambiguously benefit from liberalisation of trade in tropical products (for example, cotton, sugar, bananas), but subsidies for tropical products are only a small part of the reported $300 billion in artificial support for farmers in rich countries. In short, liberalise trade in agriculture but... the benefits will accrue overwhelmingly to the large food exporters: the United States, Canada, Argentina, Brazil and Australia' (p282).

But such reservations do not prevent endorsement of a single overwhelming message: clear away the tangled webs of bad government which obstruct profit making, fertilise the ground with a little bit of extra aid and debt relief, and entrepreneurship will flourish, industry and agriculture will grow and everyone will become prosperous.

Sachs and the authors of the Commission on Africa believe this message. They are ideologically committed to capitalism in its neo-liberal form. And this is what they are propagandising even while they talk of aid, debt relief and a level playing field for trade. But it is not a recipe that can, as they claim, abolish poverty.

Success in trade in the modern world is only possible if you already have a high level of investment in modern technologies. Countries which do not have that are doomed even when no barriers exist to their selling goods in advanced countries. In fact, as different poor countries compete with each other to sell, they can force the world price of the things they are selling down and make each other even poorer.

The case of coffee

This has been shown graphically in recent years in the case of coffee. Since the advanced countries do not produce coffee themselves, they take no protectionist measures against imports. But the price of coffee on world markets dropped through the floor when Vietnam promoted coffee cultivation a few years back as part of its drive to export its way out of poverty. This might have led to a drop in poverty in Vietnam (although 35 percent of the population still live below the poverty line while the gap between the country's rich and poor grows greater), but it has pushed coffee producers elsewhere in the world into greater poverty. The adoption of neo-liberal policies by the post-Sandinista rulers of Nicaragua has not prevented hundreds of thousands of its coffee farmers being driven to desperate poverty in a country which is the poorest in mainland Latin America.

Something similar happened to certain manufacturing industries in sub-Saharan Africa in the late 1980s. Just as they were beginning to penetrate certain markets, Chinese industries began a great export drive that undercut them, causing deindustrialisation in Africa.

It is not true that once a country is 'on the ladder of development' things always get better for the mass of its people. The capitalist drive to ruthless competition between firms and nations knows no limit. Success at one stage does not guarantee success - and a livelihood for the workers and peasants - at another stage.

A country going through a supposed economic miracle in one decade can be regarded as a basket case the next. Brazil, which was the toast of capitalist economists worldwide as it experienced new and massive economic expansion in the 1970s, suffered a 'lost decade' in the 1980s. Argentina, the only Latin American country with European living standards in the 1940s and the toast of Sachs's neo-liberal friends in the early 1990s, could go into a catastrophic crisis in 2001. No one, least of all the neo-liberal economists who have taken to advising us on how to fight poverty, has any idea whether the Chinese and Indian economies will keep expanding over the next decade, will get trapped in stagnation like Japan, or will fall backwards like Argentina. The blind forward rush of world capitalism cannot provide such guarantees.

But it is not only that the neo-liberal advisers cannot provide a guarantee of success. It is also that their approach has one-sided consequences if accepted by those who would fight alongside the poor. It means accepting neo-liberal measures so as to satisfy the criteria of 'governance' in the hope that the debt relief, the aid and the level playing field for trade will be forthcoming. But the neo-liberal advisers themselves cannot deliver their side of the supposed bargain. For they themselves do not run the system. They are ideologists for free market capitalism, the messenger boys to the Third World for the billionaires and corporate bosses, the monsters who run Exxon, News International, Barclays, GlaxoSmithKline or Monsanto. And these have no intention of giving up any substantial amount of their loot, regardless of the requirements of the starving.

Sachs provides us with a peep at how the billionaire class treat people like him. He tells how he begged the Bush Snr and Clinton administrations to provide debt relief and aid so that the 'shock treatment' he helped administer to Russia might not be disastrous for many of its people. But this did not suit big capital and suddenly his friends in Washington did not want to listen to him.

For him, however, it was not a case of once bitten, twice shy. He tells how at the Monterey international conference on financing development in 2002, 'the United States and other signatories agreed to urge all other countries to make concrete efforts towards the goal of 0.7 percent of Gross National Product as official development assistance... US ambassador to the UN John [Negroponte] came over to me, patted me on the back and whispered in my ear, "You're getting what you asked for"... For a brief moment I was optimistic... Alas my hopes were deflated a few months later' (p218). Anyone who can be optimistic after being patted on the back by the man who gave the go-ahead to death squads as ambassador in Honduras must be capable of deluding themselves to an enormous extent. That is no reason anyone else should be deluded along with them.

Corporate globalisation, in other words, is not the way to get to get rid of poverty. This was the great insight of those who demonstrated against the WTO at Seattle in 1999 and against the G8 in Genoa in 2001 and Annemasse in 2003. Those who embrace Blair, Brown, Sachs and the Commission on Africa are in danger of making people lose the insight in the run-up to the G8 2005 in Scotland. When elements in Make Poverty History tell the press they do not want an 'anti-globalisation' protest in Edinburgh, you have to wonder whether they want a love-in with the G8 instead. When they refuse to allow the Stop the War Coalition to affiliate, you have to wonder about their friendly relations with a chancellor who spends many times more on weapons of mass destruction than on aid and debt relief combined.

However, those who see you cannot fight poverty without fighting the system represented by the G8 should not turn their backs on the demonstration. It is going to be enormous, and represent an enormous gut reaction against what the system is doing to hundreds of millions of people, regardless of attempts by the neo-liberal advisers to create new illusions in the system.

Among some of the organisers and among most people preparing to go to Edinburgh, there is a sense that it is the system that is wrong and that the advisers and the neo-liberals are not to be trusted. There is justified bitterness from some of the NGOs with the way previous promises on aid and debt have turned hollow. There is distrust towards people like Sachs when, as Patrick White of ActionAid points out, his UN Millennium Project report 'takes a gung-ho approach to trade liberalisation in poor countries, despite the evidence that this can undermine poverty reduction'. And there should be unanimous outrage at the G8 (including Blair and Brown's government) allowing Bush to put the warmonger Paul Wolfowitz in charge of the World Bank.

Those who have learnt the lessons of the movement since Seattle need to be in Edinburgh and to bring as many other people with them as possible. We have a right to be there in a way that those who have endorsed structural adjustment programmes and shock treatment do not. And we need to hammer home the message that the movement cannot fight poverty and embrace neo-liberalism, that you cannot stand on the side of the world's poor if you consort with those who would throw them to the Wolfowitz.

Instead, we should call as a minimum to:

Drop all the debt without conditions, not just part of it for the poorest of the poor.

Stop the IMF and the World Bank imposing so called free market policies.

Stop western multinationals pumping profits out of the global south.

End the occupations of Iraq and Afghanistan and the threats to other countries.

Use the hundreds of billions spent on arms to really deal with the causes of poverty.